Correlation Between JBG SMITH and BRC
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and BRC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JBG SMITH and BRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBG SMITH Properties and BRC Inc, you can compare the effects of market volatilities on JBG SMITH and BRC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JBG SMITH with a short position of BRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and BRC.
Diversification Opportunities for JBG SMITH and BRC
Poor diversification
The 3 months correlation between JBG and BRC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and BRC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRC Inc and JBG SMITH is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JBG SMITH Properties are associated (or correlated) with BRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRC Inc has no effect on the direction of JBG SMITH i.e., JBG SMITH and BRC go up and down completely randomly.
Pair Corralation between JBG SMITH and BRC
Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the BRC. But the stock apears to be less risky and, when comparing its historical volatility, JBG SMITH Properties is 1.7 times less risky than BRC. The stock trades about -0.06 of its potential returns per unit of risk. The BRC Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 325.00 in BRC Inc on September 12, 2024 and sell it today you would lose (11.00) from holding BRC Inc or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. BRC Inc
Performance |
| Timeline |
| JBG SMITH Properties |
| BRC Inc |
JBG SMITH and BRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and BRC
The main advantage of trading using opposite JBG SMITH and BRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, BRC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BRC will offset losses from the drop in BRC's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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